Costly cities are costly for a reason. Be it climate, geography, culture, economic prosperity or all of the above, the most expensive U.S. cities to live in offer amenities and opportunities for which residents are willing to pay a premium to access. It’s simply the price of admission to enjoy the advantages a desirable place has to offer.

“It's all about trade-offs and opportunity costs when choosing to live in one place over another,” says Jennie Allison of the Center for Regional Economic Competitiveness, a nonprofit research and policy group. “In Hawaii, this is called a ‘Paradise Tax,’ and in Florida many people are likely familiar to the reference of the ‘Sunshine Tax.’” On the plus side, notes Allison: Wages are often higher in these cities, too, which makes a steeper cost of living more manageable.

We compiled our list of the most expensive U.S. cities to live in based on the Council for Community and Economic Research's calculations of living expenses in 288 urban areas. Its Cost of Living Index measures prices for housing, groceries, utilities, transportation, health care, and miscellaneous goods and services such as getting your hair done or going to a movie. Take a closer look at the nation’s most expensive cities.

(The Cost of Living Index is based on price data collected during 2016. City-level data on populations, household incomes and home values come from the U.S. Census Bureau. Metropolitan-area unemployment rates come from the U.S. Bureau of Labor Statistics and represent 2016 averages. For the purposes of finalizing this list, the New York City boroughs of Manhattan and Brooklyn were treated as separate cities; Orange County, Calif., was screened out because it contains multiple cities with large populations including Anaheim, Santa Ana and Irvine.)

Most Expensive U.S. Cities to Live In 2017

10. Seattle

•Cost of Living: 44.9% above U.S. average

•City Population: 684,451

•Median Household Income: $70,594 (U.S.: $53,889)

•Median Home Value: $452,800 (U.S.: $178,600)

•Unemployment Rate: 4.5% (U.S.: 4.9%)

Coffee isn’t the only thing that’s strong in Seattle. The local economy is, too, and that's putting upward pressure on prices. As one of the nation's fastest growing cities, Seattle’s housing market is hot, driven in part by a booming tech scene. (Microsoft and Amazon are both based in the area, as are many smaller high-tech companies.) Housing-related costs for renters and homeowners are nearly 80% higher than the U.S. average, according to the Cost of Living Index, and they're only going up. Real estate-tracker Zillow expects home prices in the Emerald City to rise another 5.6% in 2017.

9. Stamford, Conn.

•Cost of Living: 45.7% above U.S. average

•City Population: 128,874

•Median Household Income: $79,359

•Median Home Value: $501,200

•Unemployment Rate: 5.0%

With its close proximity to New York City, Stamford has long been home to wealthy commuters. In fact, despite its relatively small population, the Connecticut city has one of the highest concentrations of millionaires in the country. But as expensive as Stamford’s living costs are, they are still less than the Big Apple. (More on the cost of living in New York City later.) If there's another upside to be found, it's in transportation costs. Extensive commuter rail links to New York and its position in the Northeast rail corridor help make getting around only 11% more expensive than the national average, according to the Cost of Living Index.

8. Boston

•Cost of Living: 47.9% above U.S. average

•City Population: 667,137

•Median Household Income: $55,777

•Median Home Value: $393,600

•Unemployment Rate: 3.4%

With its unparalleled collection of universities, hospitals, historical sites, and tech and biotech employers, it's easy to see why Boston is such an appealing place to live. And while there’s no question the city’s popularity comes at a high cost, it’s not nearly as high as some East Coast cities that are often mentioned in the same breath as Boston. After all, the high concentrations of students, recent grads and young professionals require some level of affordability to get by while they’re starting out. Groceries, for example, run just 6% above the national average in Boston, far less than residents of the other cities on this list pay. The median home value, while high relative to the U.S. median, is the lowest among our expensive cities.

7. Oakland, Calif.

•Cost of Living: 48.4% above U.S. average

•City Population: 419,267

•Median Household Income: $54,618

•Median Home Value: $458,500

•Unemployment Rate: 3.8%

Oakland anchors one corner of a sort of Bermuda Triangle around San Francisco Bay where affordable prices go missing. The second corner is San Francisco, as famous for its sky-high real estate as it is for Alcatraz and Fisherman’s Wharf. The third corner is Silicon Valley, home to high-tech giants handing out six-figure salaries like candy on Halloween. Compared to its neighbors to the west and south, Oakland might seem a bargain. But consider this: The median household income in Oakland is about the same as the U.S. median, yet median home values are 2.5 times the U.S median. And after rising 9.6% over the last year, Oakland home prices are expected to climb another 2.9% in the next 12 months, according to Zillow estimates.

6. Washington, D.C.

•Cost of Living: 49% above U.S. average

•City Population: 681,170

•Median Household Income: $70,848

•Median Home Value: $475,800

•Unemployment Rate: 3.8%

The nation's capital is a tale of two cities when it comes to living costs. Housing-related expenses including rents and mortgages are by far the most burdensome at more than double the national average, according to the Cost of Living Index, but other expenses aren’t too far above average. In fact, D.C. health-care costs are slightly below the national average. A wide-ranging bus and metro system makes getting to and around the District of Columbia affordable. The Circulator bus, for example, costs just $1 and its routes reach popular spots including Georgetown, Union Station and the National Mall. Numerous museums and historical sites are free to visit.

5. Brooklyn, N.Y.

•Cost of Living: 73.3% above U.S. average

•City Population: 2,629,150

•Median Household Income: $48,201

•Median Home Value: $570,200

•Unemployment Rate: 4.8%

Technically, Brooklyn is one of the five boroughs that make up New York City, but in recent years it has emerged as something of a metropolis onto itself. Indeed, if Brooklyn was an independent city, its population would be on par with Chicago, the third-largest city in the nation. Not so long ago, Brooklyn was considered a viable alternative for those who couldn’t afford to live in Manhattan. Not anymore. Housing-related expenses including rents and mortgages are three times the national average. Any yet, the median household income in Brooklyn is more than $5,000 below the U.S. median and nearly $25,000 shy of the median household income in Manhattan.

4. San Francisco

•Cost of Living: 77.2% above U.S. average

•City Population: 864,816

•Median Household Income: $81,294

•Median Home Value: $799,600

•Unemployment Rate: 3.8%

Years of relentless growth driven by high-paid tech workers have given San Francisco some of the highest living costs in the country, meaning even those with fat paychecks can struggle to make ends meet. Home prices are famously high, an obstacle for aspiring homeowners, and renters fare little better. The average rent for an apartment in San Francisco is $3,548 a month, according to the Cost of Living Index. That’s 3.5 times the national average. or three times the national average. Yes, median household income is the second highest on this list, but even then it's easy for San Franciscans to feel the financial strain.

3. Honolulu

•Cost of Living: 90.1% above U.S. average

•City Population: 992,605

•Median Household Income: $74,460

•Median Home Value: $580,200

•Unemployment Rate: 2.8%

Remember the “paradise tax” that Jennie Allison of the Center for Regional Economic Competitiveness talked about? Well, it’s collected in spades in Hawaii. To enjoy the perks of living in such a remote Pacific paradise, Honolulu residents pay more than they would on the mainland for pretty much everything -- and it’s not hard to understand why. Most goods sold in Hawaii must arrive either by boat or by plane, which jacks up the price considerably. Honolulu has the most expensive groceries of all 288 urban areas surveyed for the Cost of Living Index. Eggs, for example, cost two-thirds more than the national average and margarine costs double. Gasoline goes for 30% more than it does in the continental U.S.

2. Sunnyvale, Calif.

•Cost of Living: 122.9% above U.S. average

•City Population: 151,754

•Median Household Income: $105,401

•Median Home Value: $790,300

•Unemployment Rate: 3.8%

Either play the lottery or brush up on your computer coding skills if you hope to survive in this pricey California city. Sunnyvale and its Silicon Valley surroundings are famous for being home to some of the biggest tech companies in the world -- and for being home to exorbitant living expenses. Yahoo is headquartered in Sunnyvale and tech behemoths such as Google, Apple, Intel and Tesla are based nearby. No wonder overall housing-related costs are the highest in the land, according to the Cost of Living Index, running 375% above average. A six-figure median income, tops in the U.S., helps Sunnyvale's citizens bear the financial burden.

1. Manhattan, N.Y.

•Cost of Living: 127.8% above U.S. average

•City Population: 1,643,347

•Median Household Income: $72,871

•Median Home Value: $848,700

•Unemployment Rate: 4.8%

If you’ve ever been to Manhattan, you don’t need us to tell you that it’s an expensive place to visit. It’s even more expensive to live there. With space at a premium and location paramount, the median home value in Manhattan is the highest among our expensive cities. So, too, is the rent for an apartment, which averages a staggering $4,239 a month. The budget-busting doesn't stop there. Residents pay a premium of 43% at the grocery store, health care is a third more costly than average, and transportation is 30% above average. Want to see a movie? Ticket prices are nearly 50% higher, on average, than is the norm in the rest of the country. Oh, and you’ll need to like crowds if you hope to make it in the Big Apple: Manhattan packs in nearly 70,000 residents per square mile, according to the U.S. Census Bureau.

Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail info@diversifiedassetmanagement.com.

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